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MSP Rising - An HRO Today Article

Domain experts from the hottest area in HR services explore its promise and pitfalls.
By Drew Dix for the HRO Today MSP Executive Guide

Today's leading supplier of managed service programs (MSP) face an array of new challenges as their profession evolves. An increasing number of firms are using many types of human capital outside fulltime workforces that presently include temp labor and outsourced project workers. The five primary sponsors of the 2011 MSP Summit recently shared their insights about how an MSP can become much more strategic in delivering efficiencies and savings. Providers largely agree on the chief benefits offered by MSP: cost savings, compliance, and analytics.

MSP can often provide a reduction in operational costs of 15 to 20 percent through economies of scale, according to Scott Fraleigh, vice president of managed services at SourceRight Solutions. "Substantial savings can be achieved through increased program visibility, the elimination of rogue spend, and an optimized supply chain," he said.

Guidant Group's director of client solutions, Andrew Zarkadas, stressed that some firms lack the in-house ability to uncover risk and needless expense. "We want to provide not just tool sets, but guidance as well," he said. "We help clients answer the basic questions about transparency: What are we spending? Who are we spending it with?"

Compliance is another key advantage with an MSP. Staff Management | SMX's global vice president of vendor management solutions, Christine Abbeduto, estimates that the federal government lost more than $7 billion in tax revenue due to 1099 non compliance alone during the 2009 tax year. "This has become a serious issue - quite a laundry list of lost revenue for the government. It's the result of a perfect storm: the government looking to collect what's owed, and an economic crisis that's propelling them to more scrutiny as well," she said.